Auto Parts Supply Chain Survey: NEV Recovery, Robotics Mass Production Imminent
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Auto Parts Supply Chain Survey: NEV Recovery, Robotics Mass Production Imminent
UBS survey indicates that Shuanghuan and Rongtai saw sequential improvement in NEV business in Q2; North American top-tier client's robot mass production is imminent. Bullish on auto parts suppliers' transition opportunity to robotics.
- Domestic NEV business showed significant sequential improvement in Q2 with increased capacity utilization.
- Rising NEV penetration rate in Europe injects new growth momentum into traditional businesses.
- North American top-tier robot manufacturer's mass production is imminent with smooth supply chain cooperation.
- Shuanghuan Driveline's NEV gear capacity utilization exceeds 90%; expanding into AIDC business.
- Rongtai Electric's robot precision screws received PPAP approval; order ramp-up observed in June.
- Keda Lithium identified as top pick with high visibility in both core and robotics businesses.
- Industry risks include transmission of vehicle price cuts pressure and rising raw material costs.
Report interpretation
Overview
This research report is based on the China auto supply chain executive survey organized by UBS in Jiaxing on June 10, covering Shuanghuan Driveline and Rongtai Electric. The core conclusion is that NEV-related businesses showed obvious sequential improvement in the second quarter. Additionally, humanoid robots have become the new strategic focus for these traditional auto parts manufacturers, especially as mass production processes for North American top-tier clients accelerate. The report maintains Buy ratings for all covered companies and lists Keda Lithium as the top pick for the APAC region.
Core views
NEV businesses show signs of recovery. Survey feedback indicates that domestic NEV-related shipment volumes achieved significant sequential growth in Q2 2026. Taking Shuanghuan Driveline as an example, its NEV gear capacity utilization has exceeded 90%, and the application of co-axial reducers in the domestic market is expected to accelerate. Regarding overseas markets, with the rise of NEV penetration rates in Europe, traditional businesses of related supply chain enterprises have gained new growth momentum. Shuanghuan's Hungarian plant is ramping up steadily, targeting 1 million units of overseas NEV gear shipments. Humanoid robot business has entered the substantive implementation phase. Cooperation progress between supply chain enterprises and North American top-tier humanoid robot manufacturers is positive. Since 2025, Shuanghuan Driveline has jointly developed customized new reducers with this customer, and cooperation is proceeding smoothly. Rongtai Electric's dexterous hand and body precision screws have obtained Production Part Approval Process (PPAP) from this customer, and order ramp-ups were observed in June. New products such as motors, gearboxes, and structural parts are also in sample submission stages. Rongtai is also accelerating the construction of its Thailand factory in preparation for mass production in the second half of the year. Target selection and diversified layout. Under the trend of automotive component suppliers transforming into the robotics sector, the report believes that Keda Lithium, Rongtai Electric, Shuanghuan Driveline, and actuator leaders are the most likely winners. Among them, Keda Lithium is selected as the top pick due to stable core business growth and high visibility of its robotics business. Furthermore, enterprises are exploring other incremental markets. For instance, Shuanghuan Driveline has expanded gear applications to the AI Data Center (AIDC) generator field, with key customers including Caterpillar and Yuchai, expected to start contributing revenue in 2026. Rongtai's traditional mica insulation business also benefits from new orders from Tesla's semi-trucks and Cybercab.
Analysis framework
The report employs a combined methodology of on-site surveys and executive interviews to validate factory operations and order statuses directly, thereby refining investment judgments. The analytical logic follows a dual-wheel drive framework of 'Core Business + Second Curve': On one hand, it tracks high-frequency indicators such as domestic and European NEV sales and capacity utilization to confirm the inflection point of the main business; on the other hand, it evaluates the commercial certainty of robotics businesses by tracking product certification progress (e.g., PPAP), joint R&D status, and overseas factory construction pace of key customers (such as North American top-tier robot manufacturers). This approach of deriving macro industry trends from micro operational data effectively compensates for the lag inherent in relying solely on financial statements.
Methodology notes
Capacity Utilization as a Leading Indicator of Sentiment
In manufacturing analysis, capacity utilization often leads performance in revenue and profits. When utilization exceeds critical thresholds like 90%, it usually signifies a reversal in supply-demand relations, indicating that enterprises are entering inventory replenishment or expansion cycles, serving as important micro-signals to identify industry inflection points.
PPAP Certification as a Mass Production Milestone
The Production Part Approval Process (PPAP) is a critical node in the automotive and high-end manufacturing supply chain. Obtaining PPAP approval means that the supplier's product quality and production process have been formally recognized by the customer. It is a necessary prerequisite for shifting from R&D to scaled mass production and serves as the core basis for forecasting future order surges.
Cross-Sector Technology Reuse and Customer Stickiness
When analyzing the transformation of traditional auto parts enterprises into robotics, priority is given to examining their ability to reuse core technologies (e.g., precision gears, heat treatment) in new fields, and the customization barriers formed through joint R&D with top-tier customers. Such deep binding not only increases switching costs but also provides early certainty for new businesses.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Keda Lithium (002850.SZ)Top pick; core business shows stable growth and high visibility in robotics
- Strengths
- UBS APAC Key Call Buy, supported by fundamentals and growth expectations
- Comparison
- Stronger certainty in robotics business implementation compared to peers
- Risks
- Capacity construction below expectations, loss of share from key customers, raw material price hikes, trade friction
- Shuanghuan Driveline (002472.SZ)Leader in NEV gears, actively expanding into AIDC and robot reducers
- Strengths
- Q2 capacity utilization exceeds 90%; smooth joint R&D with North American top-tier robot customers
- Comparison
- Strong technical reusability in gears and early overseas layout
- Risks
- EV penetration rate below expectations, obstacles in co-axial reducer applications, overseas expansion bottlenecks
- Rongtai Electric (603119.SS)Precision screws certified by top-tier client; traditional business benefits from new Tesla orders
- Strengths
- Robotics products PPAP approved; Thailand factory preparing for H2 mass production
- Comparison
- Product line extending from insulation materials to precision mechanical parts
- Risks
- Slowing overseas EV penetration, mica replacement by new materials, delayed robotics commercialization
Key data
- Shuanghuan Driveline NEV Gear Capacity Utilization>90%Q2 2026 data, showing capacity nearing saturation and significant sequential improvement
- Shuanghuan Driveline Overseas NEV Gear Shipment Target1 million unitsRelying on steady ramp-up of the Hungarian plant
- Rongtai Electric Robotics Product ProgressPPAP ApprovedPrecision screws for North American top-tier client; order ramp-up began in June
- Keda Lithium Share Price (as of 2026.6.10)187.53 CNYUBS APAC Key Call Buy top pick
Impact & implications
For the auto parts industry, this signifies a transition from pure EV support to a multi-drive model of "EV + Robotics + AI Computing Infrastructure." Enterprises that successfully enter the North American top-tier robot supply chain are expected to see a restructuring of their valuation systems within the next 1-2 years. Meanwhile, the recovery in the European market provides a crucial digestion window for Chinese supply chain enterprises' overseas capacity, alleviating previous market concerns regarding return periods for overseas factory investments.
Risks
- Decline in overall vehicle sales leading to shrinkage in component demand
- Automakers facing profit pressure transmitting price-cutting pressure to upstream suppliers
- Intensified industry competition triggering price wars
- Rising costs of copper, aluminum, and other raw materials eroding profits
- Quality issues triggering recall risks
- Trade friction negatively affecting imports and exports of components
- Robotics commercialization progress or new customer acquisition falling short of expectations
What to watch
- Mass production schedules and actual shipment volumes of North American top-tier humanoid robot manufacturers
- Ramp-up progress of Shuanghuan Driveline's Hungarian plant and overseas order delivery status
- Construction of Rongtai Electric's Thailand factory and H2 mass production readiness
- Changes in penetration rates of domestic co-axial reducers in new energy vehicles
- Revenue realization pace of AIDC generator gear business